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A Draft Agreement 

between the Government of the 

United Kingdom of Great Britain and Northern Ireland 

and the 

Government of the People's RepubUc of China 

on the Future of Hong Kong 



pam 
JQ672 
A2 H66 



26 September 1984 



This White Paper 

reproduces the text of the White Paper 

published by Her Majesty's Government in London 

on 26 September 1984 



TABLE OF CONTENTS 



cf^ 



Page 

Introduction 1 

Joint Declaration 11 

Annex I to the Joint Declaration: Elaboration by the Government 
of the People's Republic of China of its Basic Policies regarding 

Hong Kong 14 

Annex II to the Joint Declaration: Sino-British Joint Liaison Group 26 

Annex III to the Joint Declaration: Land Leases 28 

Exchange of Memoranda 31 

Explanatory Notes 35 



INTRODUCTION 

1. On 26 September 1984 representatives of the Governments of the United 
Kingdom and of the People's Republic of China initialled the draft text of 
an agreement on the future of Hong Kong. The agreement, contained in the 
second part of this White Paper, consists of a Joint Declaration and three 
Annexes. There is an associated Exchange of Memoranda. These documents 
are the outcome of two years of negotiations between the two Governments, 
undertaken with the common aim of maintaining the stability and prosperity of 
Hong Kong. 

2. The purpose of this White Paper is to explain the background to the last two 
years' negotiations and their course, and to present the documents in their 
proper context. The text of this White Paper is also being published in Hong 
Kong by the Hong Kong Government, and the people of Hong Kong are being 
invited to comment on the overall acceptability of the arrangements which it 
describes. Thereafter the matter will be debated in Parliament. 

History 

3. During the nineteenth century Britain concluded three treaties with the then 
Chinese Government relating to Hong Kong: the Treaty of Nanking^ signed 
in 1842 and ratified in 1843 under which Hong Kong Island was ceded in 
perpetuity; the Convention of Peking^ in 1860 under which the southern part of 
the Kowloon peninsula and Stonecutters Island were ceded in perpetuity; the 
Convention of 1898^ under which the New Territories (comprising 92 per cent 
of the total land area of the territory) were leased to Britain for 99 years from 
1 July 1898. It was the fact that the New Territories are subject to a lease with 
a fixed expiry date which lay behind the decision by Her Majesty's Government 
to seek to enter negotiations with the Government of the People's Republic of 
China (referred to hereafter as "the Chinese Government") on Hong Kong's 
future. 

4. The Chinese Government has consistently taken the view that the whole of 
Hong Kong is Chinese territory. Its position for many years was that the 
question of Hong Kong came into the category of unequal treaties left over 
from history; that it should be settled peacefully through negotiations when 
conditions were ripe; and that pending a settlement the status quo should be 
maintained. The Chinese Government made its view of Hong Kong's status 
clear in a letter to the Chairman of the United Nations Special Committee on 
the Situation with regard to the Implementation of the Declaration on the 
Granting of Independence to Colonial Countries and Peoples in March 1972. 
This maintained that the settlement of the question of Hong Kong was a matter 
of China's sovereign right and that consequently Hong Kong should not be 



' British State Papers Vol. 30. p. 389 
British State Papers Vol. 50, p. 10 
British State Papers Vol. 90, p. 17 



2 



included in the list of colonial territories covered by the Declaration on the 
Granting of Independence to Colonial Countries and Peoples. 

The Background to the Negotiations 

5. In the late 1970's, as the period before the termination of the New Territories 
lease continued to shorten, concern about the future of Hong Kong began to be 
expressed both in the territory itself and among foreign investors. In particular 
there was increasing realisation of the problem posed by individual land leases 
granted in the New Territories, all of which are set to expire three days before 
the expiry of the New Territories lease in 1997. It was clear that the steadily 
shortening span of these leases and the inability of the Hong Kong Government 
to grant new ones extending beyond 1997 would be likely to deter investment 
and damage confidence. 

6. Her Majesty's Government had by this time, following a detailed examina- 
tion of the problem conducted in consultation with the then Governor, 
concluded that confidence would begin to erode quickly in the early to 
mid-1980"s if nothing was done to alleviate the uncertainty caused by the 1997 
deadline. Accordingly, when the Governor of Hong Kong visited Peking in 
March 1979 at the invitation of the Chinese Minister of Foreign Trade, an 
attempt was made, on the initiative of Her Majesty's Government, to solve the 
specific question of land leases expiring in 1997. These discussions did not result 
in measures to solve the problem. 

7. In the course of the next two years there was increasing awareness of the need 
to remove the uncertainty which the 1997 deadline generated. The importance 
of the issue was publicly stressed by the senior Unofficial Member of the 
Executive Council in May 1982. In January 1982 Sir (then Mr) Humphrey 
Atkins, Lord Privy Seal, visited Peking and was given significant indications of 
Chinese policy towards Hong Kong by Chinese leaders, which confirmed the 
view of Her Majesty's Government that negotiations should be opened with the 
Chinese Government. 

The Prime Minister's Visit to China 

8. Against this background Her Majesty's Government decided that the Prime 
Minister's visit to China in September 1982 would provide an opportunity to 
open discussions with the Chinese Government on the future of Hong Kong. It 
was evident that the Chinese Government had reached the same conclusion, and 
substantive discussions took place during the visit. Following a meeting 
between the Prime Minister and Chairman Deng Xiaoping on 24 September 
1982 the following joint statement was issued: 

"Today the leaders of both countries held far-reaching talks in a friendly atmosphere 
on the future of Hong Kong. Both leaders made clear their respective positions on this 
subject. 

They agreed to enter talks through diplomatic channels following the visit 
with the common aim of maintaining the stability and prosperity of Hong Kong." 



The Course of the Negotiations 

9. The Prime Minister's visit was followed by the first phase of negotiations 
conducted by Her Majesty's Ambassador in Peking and the Chinese Foreign 
Ministry. These consisted of exchanges between the two sides on the basis on 
which the negotiations would be conducted, and on the agenda. On 1 July 1983 
it was announced that the second phase of the talks would begin in Peking on 
12 July. The pattern of negotiation in the second phase, which was continued 
until the end of the negotiations, was for foiTnal rounds of talks to be held 
between delegations led by Her Majesty's Ambassador in Peking and a Vice or 
Assistant Minister of the Chinese Foreign Ministry, supplemented as necessary 
by informal contacts between the two delegations. The Governor of Hong Kong 
took part in every round of formal talks as a member of the British delegation. 

10. In the course of the negotiations Her Majesty's Government explained in 
detail the systems which prevail in Hong Kong and the importance for these 
systems of the British administrative role and link. Following extensive dis- 
cussion, however, it became clear that the continuation of British administration 
after 1997 would not be acceptable to China in any form. After full consultation 
with the Governor and the Executive Council of Hong Kong. Her Majesty's 
Government therefore proposed that the two sides discuss on a conditional 
basis what effective measures other than continued British administration 
might be devised to maintain the stability and prosperity of Hong Kong and 
explore further the Chinese ideas about the future which had at that stage been 
explained to them, in order to see whether on this basis arrangements which 
would ensure lasting stability and prosperity for Hong Kong could be 
constructed. The Chinese Government was told that, if this process was 
successful. Her Majesty's Government would consider recommending to 
Parliament a bilateral agreement enshrining the arrangements. Her Majesty's 
Government also undertook in this event to assist in the implementation of such 
arrangements. Following this, Her Majesty's Government sought to explore 
with the Chinese Government the implications of the Chinese Government's 
concept of Hong Kong as a Special Administrative Region of the People's 
Republic of China. In response, the Chinese side further elaborated its policies 
and ideas. 

11. In April 1984 the two sides completed initial discussion of these matters. 
There were a number of outstanding unresolved points, but it was by then clear 
that an acceptable basis for an agreement might be possible. At the invitation of 
the Chinese Government the Secretary of State for Foreign and Commonwealth 
Affairs visited Peking from 15 to 18 April. During his meetings with Chinese 
leaders the two sides reviewed the course of the talks on the future of Hong 
Kong, and further progress was made. In Hong Kong on 20 April Sir Geoffrey 
Howe made a statement on the approach of Her Majesty's Government to the 
negotiations. He said that it would not be realistic to think of an agreement that 
provided for continued British administration in Hong Kong after 1997: for 
that reason Her Majesty's Government had been examining with the Chinese 



Government how it might be possible to arrive at arrangements that would 
secure for Hong Kong, after 1997, a high degree of autonomy under Chinese 
sovereignty, and that would preserve the way of life in Hong Kong, together 
with the essentials of the present systems. He made it clear that Her Majesty's 
Government were working for a framework of arrangements that would 
provide for the maintenance of Hong Kong's flourishing and dynamic society, 
and an agreement in which such arrrangements would be forma];\ set out. 

12. After Sir Geoffrey Howe's visit in April 1984 negotiations continued. A 
working group was established on 21 June 1984 to meet full-time in Peking 
and consider documents tabled by both sides. From 27 to 31 July 1984 the 
Secretary of State for Foreign and Commonwealth Affairs again visited Peking. 
The visit was devoted almost entirely to the future of Hong Kong. Sir Geoffrey 
Howe announced in Hong Kong on 1 August that very substantial progress had 
been m"de towards agreement on the form and content of documents which 
would set out arrangements for Hong Kong's future with clarity and precision, 
in legally binding form. 

13. Sir Geoffrey also announced on the same occasion that the two sides had 
agreed to establish a Sino-British Joint Liaison Group which would come into 
being when the agreement came into force and continue until the year 2000. It 
would meet in Peking. London and Hong Kong. It was agreed that the Group 
would not be an organ of power. Its functions would be: liaison, consultation on 
the implementation of the agreement, and exchange of information. It was 
agreed that it would play no part in the administration of Hong Kong. Her 
Majesty's Government would continue to be responsible for the administration 
of Hong Kong up to 30 June 1997. 

14. Following Sir Geoffrey Howe's visit the negotiations continued on the 
remaining unresolved issues and three further rounds of plenary talks took 
place. A further ad hoc working group was established in Peking on 24 August. 
By 18 September negotiators on both sides had approved the English and 
Chinese te.xts of the documents that make up the agreement and the associated 
E.xchange of Memoranda. These were submitted to British Ministers and 
Chinese leaders for final approval. The texts were initialled by the two 
delegation leaders on 26 September. 

Consultation with the People of Hong Kong 

15. From the beginning of the negotiations Her Majesty's Government have 
been conscious that the negotiations concerned the interests and future of 
the five and a half million people of Hong Kong. It has been the consistent 
position of Her Majesty's Government that any agreement with the Chinese 
Government on the future of the territory should be acceptable to the people of 
Hong Kong as well as to the British Parliament and the Chinese Government. 

16. The negotiations had to be conducted on a basis of confidentiality. This was 
crucial to their success, but the maintenance of confidentialitv also caused much 



concern and anxiety among the people of Hong Kong who were understandably 
anxious to know what was being negotiated for their future. All members of the 
Executive Council, as the Governor's closest advisers, were kept fully informed 
on the negotiations and consulted on a continuing basis throughout the period. 
The Unofficial Members of the Executive and Legislative Councils (UMELCO) 
provided invaluable advice to the Governor and to Ministers on the course of 
the negotiations and on the attitude of the people of Hong Kong. 

17. At a number of crucial points in the negotiations the Governor and 
Unofficial Members of the Executive Council visited London for consultations 
with the Prime Minister and other Ministers. British Ministers also paid a series 
of visits to Hong Kong, to consult the Governor, the Executive Council and the 
Unofficial Members of the Executive and Legislative Councils and to keep in 
touch with opinion in the territory. The Secretary of State for Foreign and 
Commonwealth Affairs was able to describe the approach of Her Majesty's 
Government to the negotiations in his statement in Hong Kong on 20 April 
1984, and to fill in more details of what might eventually be included in an 
agreement in a further statement in the territory on 1 August 1984. In the course 
of the negotiations, and in particular since the statement of 20 April, numerous 
individuals and groups in Hong Kong have made specific proposals on what 
should be included in an eventual agreement. The Legislative Council of Hong 
Kong has debated aspects of the future of the territory on a number of 
occasions. Her Majesty's Government have paid close attention to these 
expressions of opinion which the Hong Kong Government have relayed to 
Ministers, and to views about the future expressed through a variety of 
channels — by and through UMELCO, through the press, through individual 
communications addressed to Her Majesty's Government or the Hong Kong 
Government. In this way Her Majesty's Government have sought to take into 
account the views of the people of Hong Kong to the maximum extent possible 
during the negotiations. 

18. In the same way the maintenance of confidentiality has made the task of 
consulting Parliament on the negotiations more difficult. Despite this there were 
debates on Hong Kong in October and November 1983 and in May 1984. and 
part of the Foreign Affairs Debate in March 1984 was also devoted to Hong 
Kong. Members of Parliament have kept in close touch with the people of Hong 
Kong, both through visits to the territory and through meetings with Hong 
Kong delegations visiting the United Kingdom. 

Introduction to the Agreement 

19. The full text of the draft agreement is included in the second part of this 
White Paper. It consists of a Joint Declaration and three Annexes. Each part of 
the agreement has the same status. The whole makes up a formal international 
agreement, legally binding in all its parts. An international agreement of this 
kind is the highest form of commitment between two sovereign states. 



20. The Joint Declaration consists in part of linked declarations by Her 
Majesty's Government and the Chinese Government. In paragraph 1 the 
Chinese Government declares that it will resume the exercise of sovereignty over 
Hong Kong on 1 July 1997. In paragraph 2 Her Majesty's Government declare 
that they will restore Hong Kong to the Chinese Government from that date. In 
paragraph 3 the Chinese Government sets out its policies towards Hong Kong 
after 30 June 1997. In paragraph 4 the two Governments jointly declare that 
Her Majesty's Government will remain responsible for the administration of 
Hong Kong up to 30 June 1997. Paragraphs 5 and 6 deal with the Joint Liaison 
Group and land. Paragraph 7 constitutes the important link between the 
declarations by the two parties; it has the effect of making the Joint Declaration 
and the Annexes to it legally binding in their entirety on the two Governments. 
Paragraph 8 provides for the agreement to enter into force on ratification. 
Ratification will take place before 30 June 1985. 

21. The agreement sets out clearly the relationship between the provisions 
which it contains and the future Basic Law of the Hong Kong Special 
Administrative Region, to be promulgated by the National People's Congress 
of the People's Republic of China. Paragraph 3(12) of the Joint Declaration 
provides that the basic policies in the Joint Declaration and the elaboration of 
them in Annex I will be stipulated in the Basic Law. They will remain 
unchanged for 50 years. 

22. Annex I contains an elaboration of Chinese policies for the Hong Kong 
Special Administrative Region. The Annex deals in detail with the way Hong 
Kong will work after 1 July 1997. and describes the extent of the autonomy and 
continuity which will prevail then. The subjects dealt with in the various 
sections of this Annex are: 

(I) constitutional arrangements and government structure: 

(II) the laws; 

(III) the judicial system; 

(IV) the public service; 
(V) the financial system; 

(VI) the economic system and external economic relations; 
(VII) the monetary system; 
(VIII) shipping: 
(IX) civil aviation: 
(X) culture and education; 
(XI) external relations; 
(XII) defence, security and public order; 

(XIII) rights and freedoms; 

(XIV) right of abode, travel documents and immigration. 

23. Annex II sets out the provisions concerning the establishment of a Sino- 
British Joint Liaison Group. The Joint Liaison Group will be established on the 
entry into force of the agreement and will meet in Peking. London and Hong 



Kong. From 1 July 1988 it will be based in Hong Kong, although it will 
also continue to meet in Peking and London. It will continue its work until 
1 January 2000. The Annex includes terms of reference which clearly indicate 
that the Group will be a forum for liaison only and not an organ of power. 
It will neither play a part in the administration of Hong Kong nor have any 
supervisory role. 

24. Annex III deals with land leases. It covers leases that have already been 
issued by the Hong Kong Government, leases to be issued between the entry 
into force of the agreement and 1997. certain financial arrangements, and 
arrangements for the establishment of a joint Land Commission. 

25. Associated with the agreement is a separate Exchange of Memoranda on 
the status of persons after 30 June 1997 who at present are British Dependent 
Territories citizens, and related issues. The Memoranda will be formally 
exchanged in Peking on the same day as the signature of the Joint Declaration. 

26. The last part of this White Paper contains further explanatory notes on the 
text of the Annexes to the Joint Declaration and the Exchange of Memoranda. 

Views of Her Majesty's Government on the Agreement 

27. As recorded in paragraph 10 above, Her Majesty's Government have 
sought to see whether on the basis of proposals put forward by the Chinese 
Government arrangements could be constructed which would ensure lasting 
stability and prosperity for Hong Kong. They have negotiated energetically and 
they believe successfully to secure an agreement which meets the needs and 
wishes of the people of Hong Kong. The negotiations have been hard and long. 
Taking the agreement as a whole Her Majesty's Government are confident that 
it does provide a framework in which the stability and prosperity of Hong Kong 
can be maintained after 1997 as a Special Administrative Region of the People's 
Republic of China. 

28. The text of the agreement has been initialled by both sides. This represents 
a certification by the negotiators that it represents accurately the outcome of the 
negotiations. However, as is normal with international agreements negotiated 
between nations there is no realistic possibility of amending the text. The 
agreement must be taken as a whole. 

29. Her Majesty's Government have a duty to make clear beyond any pos- 
sibility of misunderstanding the alternative to acceptance of the agreement set 
out in this White Paper. In their view, there is no possibility of an amended 
agreement. The alternative to acceptance of the present agreement is to have no 
agreement. In this case the Chinese Government has made it plain that 
negotiations could not be reopened and that it would publish its own plan for 
Hong Kong. There is no guarantee that such a unilateral plan would include 
all the elements included in the draft agreement, nor would it have the same 
status as a legally binding agreement between the two countries. Whether or not 
there is an agreement between Her Majesty's Government and the Chinese 



Government the New Territories will revert to China on 1 July 1997 under the 
terms of the 1898 Convention. The remainder of Hong Kong (Hong Kong 
Island, Kowloon and Stonecutters Island) would not be viable alone. Hong 
Kong, including the New Territories, has since 1898 become an integral whole 
and Her Majesty's Government are satisfied that there is no possibility of 
dividing the New Territories which revert to China on 1 July 1997 from the 
remainder. The choice is therefore between reversion of Hong Kong to China 
under agreed, legally binding international arrangements or reversion to China 
without such arrangements. This is not a choice which Her Majesty's Govern- 
ment have sought to impose on the people of Hong Kong. It is a choice imposed 
by the facts of Hong Kong's history. 

30. Her Majesty's Government believe that the agreement is a good one. They 
strongly commend it to the people of Hong Kong and to Parliament. It provides a 
framework in which Hong Kong as a Special Administrative Region of the 
People's Republic of China will be able to preserve its unique economic system 
and way of life after 1 July 1997. The agreement preserves Hong Kong's 
familiar legal system and the body of laws in force in Hong Kong, including the 
common law. The agreement gives Hong Kong a high degree of autonomy in 
which it will be able to administer itself and pass its own legislation. It will 
enable Hong Kong to continue to decide on its own economic, financial and 
trade policies, and to participate in international organisations and trade 
agreements such as the General Agreement on Tariffs and Trade (GATT). Her 
Majesty's Government are confident that the agreement provides the necessary 
assurances about Hong Kong's future to allow the territory to continue to flourish, 
and to maintain its unique role in the world as a major trading and financial centre. 

The Agreement and the People of Hong Kong 

31. Her Majesty's Government have consistently stated that an agreement on 
the future of Hong Kong must be acceptable to the people of Hong Kong as 
well as to Parliament. In his statement on 20 April 1984 in Hong Kong the 
Secretary of State for Foreign and Commonwealth Affairs stated that the 
people of Hong Kong would need to have time to express their views on the 
agreement, before it was debated by Parliament. The people of Hong Kong will 
now have this opportunity. 

32. The text of this White Paper is also being published in Hong Kong by the 
Hong Kong Government and will be circulated through a wide variety of 
channels in the territory. An Assessment Office has been set up in Hong Kong 
under the charge of a senior official of the Hong Kong Government, directly 
responsible to the Governor. This office will provide Her Majesty's Govern- 
ment and Parliament with an analysis and assessment of opinion in Hong Kong 
on the draft agreement. Two monitors. Sir Patrick Nairne and Mr Justice 
Simon Li, have been appointed by Her Majesty's Government to observe the 
work of the Assessment Office and to report independently to the Secretary of 
State for Foreign and Commonwealth Affairs on whether they are satisfied that 

8 



the Assessment Office has properly, accurately and impartially discharged its 
duties. In the light of these two reports Her Majesty's Government will decide 
what recommendation to make to Parliament. 

33. The people of Hong Kong are now invited to comment on the overall 
acceptability of the draft agreement on Hong Kong negotiated between Her 
Majesty's Government and the Chinese Government, against the background 
set out in this White Paper. 



JOINT DECLARATION 

OF THE GOVERNMENT OF THE UNITED KINGDOM OF 

GREAT BRITAIN AND NORTHERN IRELAND 

AND 

THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA 

ON THE QUESTION OF HONG KONG 



The Government of the United Kingdom of Great Britain and Northern 
Ireland and the Government of the People's Republic of China have reviewed 
with satisfaction the friendly relations existing between the two Governments 
and peoples in recent years and agreed that a proper negotiated settlement of 
the question of Hong Kong, which is left over from the past, is conducive to the 
maintenance of the prosperity and stability of Hong Kong and to the further 
strengthening and development of the relations between the two countries on a 
new basis. To this end. they have, after talks between the delegations of the two 
Governments, agreed to declare as follows: 

1. The Government of the People's Republic of China declares that to recover 
the Hong Kong area (including Hong Kong Island. Kowloon and the New 
Territories, hereinafter referred to as Hong Kong) is the common aspiration of 
the entire Chinese people, and that it has decided to resume the exercise of 
sovereignty over Hong Kong with effect from 1 July 1997. 

2. The Government of the United Kingdom declares that it will restore Hong 
Kong to the People's Republic of China with effect from 1 July 1997. 

3. The Government of the People's Republic of China declares that the 
basic policies of the People's Republic of China regarding Hong Kong are 
as follows: 

(1) Upholding national unity and territorial integrity and taking account of 
the history of Hong Kong and its realities, the People's Republic of 
China has decided to establish, in accordance with the provisions of 
Article 31 of the Constitution of the People's Republic of China, a Hong 
Kong Special Administrative Region upon resuming the exercise of 
sovereignty over Hong Kong. 

(2) The Hong Kong Special Administrative Region will be directly under the 
authority of the Central People's Government of the People's Republic 
of China. The Hong Kong Special Administrative Region will enjoy a 
high degree of autonomy, except in foreign and defence affairs which are 
the responsibilities of the Central People's Government. 

(3) The Hong Kong Special Administrative Region will be vested with 
executive, legislative and independent judicial power, including that of 
final adjudication. The laws currently in force in Hong Kong will remain 
basically unchanged. 



(4) The Governmcni o\' the Hong Kong Special Administrative Region u ill 
be composed of local inhabitants. The chief executive will be appointed 
by the Central People's Government on the basis of the results of 
elections or consultations to be held locally. Principal officials will be 
nominated by the chief executive of the Hong Kong Special Admin- 
istrative Region for appointment by the Central People's Government. 
Chinese and foreign nationals previously working in the public and 
police services in the government departments of Hong Kong may 
remain in employment. British and other foreign nationals may also be 
employed to serve as advisers or hold certain public posts in government 
departments of the Hong Kong Special Administrative Region. 

(5) The current social and economic systems in Hong Kong will remain 
unchanged, and so will the life-style. Rights and freedoms, including 
those of the person, of speech, of the press, of assembly, of association, 
of travel, of movement, of correspondence, of strike, of choice of 
occupation, of academic research and of religious belief will be ensured 
by law in the Hong Kong Special Administrative Region. Private 
property, ownership of enterprises, legitimate right of inheritance and 
foreign investment will be protected by law. 

(6) The Hong Kong Special Administrative Region will retain the status of a 
free port and a separate customs territory. 

(7) The Hong Kong Special Administrative Region will retain the status of 
an international financial centre, and its markets for foreign exchange, 
gold, securities and futures will continue. There will be free flow of 
capital. The Hong Kong dollar will continue to circulate and remain 
freely convertible. 

(8) The Hong Kong Special Administrative Region will have independent 
finances. The Central People's Government will not levy taxes on the 
Hong Kong Special Administrative Region. 

(9) The Hong Kong Special Administrative Region may establish mutually 
beneficial economic relations with the United Kingdom and other coun- 
tries, whose economic interests in Hong Kong will be given due regard. 

(10) Using the name of "Hong Kong. China", the Hong Kong Special 
Administrative Region may on its own maintain and develop economic 
and cultural relations and conclude relevant agreements with states, 
regions and relevant international organisations. 

The Government of the Hong Kong Special Administrative Region 
may on its own issue travel documents for entry into and exit from 
Hong Kong. 

(11) The maintenance of public order in the Hong Kong Special Admin- 
istrative Region will be the responsibility of the Government of the Hong 
Kong Special Administrative Region. 

12 



(12) The above-stated basic policies of the People's Republic of China 
regarding Hong Kong and the elaboration of them in Annex I to this 
Joint Declaration will be stipulated, in a Basic Law of the Hong Kong 
Special Administrative Region of the People's Republic of China, by the 
National People's Congress of the People's Republic of China, and they 
will remain unchanged for 50 years. 

4. The Government of the United Kingdom and the Government of the 
People's Republic of China declare that, during the transitional period between 
the date of the entry into force of this Joint Declaration and 30 June 1997, the 
Government of the United Kingdom will be responsible for the administration 
of Hong Kong with the object of maintaining and preserving its economic 
prosperity and social stability; and that the Government of the People's 
Republic of China will give its cooperation in this connection. 

5. The Government of the United Kingdom and the Government of the 
People's Republic of China declare that, in order to ensure a smooth transfer of 
government in 1997, and with a view to the effective implementation of this 
Joint Declaration, a Sino-British Joint Liaison Group will be set up when this 
Joint Declaration enters into force; and that it will be established and will 
function in accordance with the provisions of Annex II to this Joint Declaration. 

6. The Government of the United Kingdom and the Government of the 
People's Republic of China declare that land leases in Hong Kong and other 
related matters will be dealt with in accordance with the provisions of Annex III 
to this Joint Declaration. 

7. The Government of the United Kingdom and the Government of the 
People's Republic of China agree to implement the preceding declarations and 
the Annexes to this Joint Declaration. 

8. This Joint Declaration is subject to ratification and shall enter into force on 
the date of the exchange of instruments of ratification, which shall take place in 
Beijing before 30 June 1985. This Joint Declaration and its Annexes shall be 
equally binding. 

Done in duplicate at Beijing on 1984 in the English and 

Chinese languages, both texts being equally authentic. 



For the For the 

Government of the United Kingdom Government of the 

of Great Britain and Northern Ireland People's Republic of China 



13 



ANNEX I 

ELABORATION BY THE GOVERNMENT OF 

THE PEOPLE'S REPl BLK OF CHINA 

OF ITS BASIC POLICIES REGARDING HONG KONG 

The Government of the People's Republic of China elaborates the basic 
policies of the People's Republic of China regarding Hong Kong as set out in 
paragraph 3 of the Joint Declaration of the Government of the United 
Kingdom of Great Britain and Northern Ireland and the Government of the 
People's Republic of China on the Question of Hong Kong as follows: 



I 

The Constitution of the People's Republic of China stipulates in Article 31 
that "the state may establish special administrative regions when necessary. The 
systems to be instituted in special administrative regions shall be prescribed by 
laws enacted by the National People's Congress in the light of the specific 
conditions." In accordance with this Article, the People's Republic of China 
shall, upon the resumption of the exercise of sovereignty over Hong Kong on 1 
July 1997, establish the Hong Kong Special Administrative Region of the 
People's Republic of China. The National People's Congress of the People's 
Republic of China shall enact and promulgate a Basic Law of the Hong Kong 
Special Administrative Region of the People's Republic of China (hereinafter 
referred to as the Basic Law) in accordance with the Constitution of the People's 
Republic of China, stipulating that after the establishment of the Hong Kong 
Special Administrative Region the socialist system and socialist policies shall 
not be practised in the Hong Kong Special Administrative Region and that 
Hong Kong's previous capitalist system and life-style shall remain unchanged 
for 50 years. 

The Hong Kong Special Administrative Region shall be directly under the 
authority of the Central People's Government of the People's Republic of 
China and shall enjoy a high degree of autonomy. Except for foreign and 
defence affairs which are the responsibilities of the Central People's Govern- 
ment, the Hong Kong Special Administrative Region shall be vested with 
executive, legislative and independent judicial power, including that of final 
adjudication. The Central People's Government shall authorise the Hong Kong 
Special Administrative Region to conduct on its own those external affairs 
specified in Section XI of this Annex. 

The government and legislature of the Hong Kong Special Administrative 
Region shall be composed of local inhabitants. The chief executive of the 

14 



Hong Kong Special Administrative Region shall be selected by election or 
through consultations held locally and be appointed by the Central People's 
Government. Principal officials (equivalent to Secretaries) shall be nominated 
by the chief executive of the Hong Kong Special Administrative Region and 
appointed by the Central People's Government. The legislature of the Hong 
Kong Special Administrative Region shall be constituted by elections. The 
executive authorities shall abide by the law and shall be accountable to the 
legislature. 

In addition to Chinese. English may also be used in organs of government 
and in the courts in the Hong Kong Special Administrative Region. 

Apart from displaying the national flag and national emblem of the People's 
Republic of China, the Hong Kong Special Administrative Region may use a 
regional flag and emblem of its own. 



II 

After the estabHshment of the Hong Kong Special Administrative Region, 
the laws previously in force in Hong Kong (i.e. the common law, rules of equity, 
ordinances, subordinate legislation and customary law) shall be maintained, 
save for any that contravene the Basic Law and subject to any amendment by 
the Hong Kong Special Administrative Region legislature. 

The legislative power of the Hong Kong Special Administrative Region shall 
be vested in the legislature of the Hong Kong Special Administrative Region. 
The legislature may on its own authority enact laws in accordance with the 
provisions of the Basic Law and legal procedures, and report them to the 
Standing Committee of the National People's Congress for the record. Laws 
enacted by the legislature which are in accordance with the Basic Law and legal 
procedures shall be regarded as valid. 

The laws of the Hong Kong Special Administrative Region shall be the Basic 
Law, and the laws previously in force in Hong Kong and laws enacted by the 
Hong Kong Special Administrative Region legislature as above. 



Ill 

After the establishment of the Hong Kong Special Administrative Region, 
the judicial system previously practised in Hong Kong shall be maintained 
except for those changes consequent upon the vesting in the courts of the Hong 
Kong Special Administrative Region of the power of final adjudication. 

15 



Judicial power in the Hong Kong Special Administrative Region shall be 
vested in the courts of the Hong Kong Special Administrative Region. The 
courts shall exercise judicial power independently and free from any inter- 
ference. Members of the judiciary shall be immune from legal action in respect 
of their judicial functions. The courts shall decide cases in accordance with the 
laws of the Hong Kong Special Administrative Region and may refer to 
precedents in other common law jurisdictions. 

Judges of the Hong Kong Special Administrative Region courts shall be 
appointed by the chief executive of the Hong Kong Special Administrative 
Region acting in accordance with the recommendation of an independent 
commission composed of local judges, persons from the legal profession and 
other eminent persons. Judges shall be chosen by reference to their judicial 
qualities and may be recruited from other common law jurisdictions. A judge 
may only be removed for inability to discharge the functions of his office, or for 
misbehaviour, by the chief executive of the Hong Kong Special Administrative 
Region acting in accordance with the recommendation of a tribunal appointed 
by the chief judge of the court of final appeal, consisting of not fewer than three 
local judges. Additionally, the appointment or removal of principal judges (i.e. 
those of the highest rank) shall be made by the chief executive with the 
endorsement of the Hong Kong Special Administrative Region legislature and 
reported to the Standing Committee of the National People's Congress for the 
record. The system of appointment and removal of judicial officers other than 
judges shall be maintained. 

The power of final judgment of the Hong Kong Special Administrative 
Region shall be vested in the court of final appeal in the Hong Kong Special 
Administrative Region, which may as required invite judges from other 
common law jurisdictions to sit on the court of final appeal. 

A prosecuting authority of the Hong Kong Special Administrative Region 
shall control criminal prosecutions free from any interference. 

On the basis of the system previously operating in Hong Kong, the Hong 
Kong Special Administrative Region Government shall on its own make 
provision for local lawyers and lawyers from outside the Hong Kong Special 
Administrative Region to work and practise in the Hong Kong Special 
Administrative Region. 

The Central People's Government shall assist or authorise the Hong Kong 
Special Administrative Region Government to make appropriate arrangements 
for reciprocal juridical assistance with foreign states. 



IV 

After the establishment of the Hong Kong Special Administrative Region, 
public servants previously serving in Hong Kong in all government depart- 

16 



menls, including the police department, and members of the judiciary may all 
remain in employment and continue their service with pay. allowances, benefits 
and conditions of service no less favourable than before. The Hong Kong 
Special Administrative Region Government shall pay to such persons who 
retire or complete their contracts, as well as to those who have retired before 
1 July 1997, or to their dependants, all pensions, gratuities, allowances and 
benefits due to them on terms no less favourable than before, and irrespective of 
their nationality or place of residence. 

The Hong Kong Special Administrative Region Government may employ 
British and other foreign nationals previously serving in the public service in 
Hong Kong, and may recruit British and other foreign nationals holding 
permanent identity cards of the Hong Kong Special Administrative Region to 
serve as public servants at all levels, except as heads of major government 
departments (corresponding to branches or departments at Secretary level) 
including the police department, and as deputy heads of some of those 
departments. The Hong Kong Special Administrative Region Government may 
also employ British and other foreign nationals as advisers to government 
departments and. when there is a need, may recruit qualified candidates from 
outside the Hong Kong Special Administrative Region to professional and 
technical posts in government departments. The above shall be employed only 
in their individual capacities and. like other public servants, shall be responsible 
to the Hong Kong Special Administrative Region Government. 

The appointment and promotion of public servants shall be on the basis 
of qualifications, experience and ability. Hong Kong's previous system of 
recruitment, employment, assessment, discipline, training and management for 
the public service (including special bodies for appointment, pay and conditions 
of service) shall, save for any provisions providing privileged treatment for 
foreign nationals, be maintained. 



The Hong Kong Special Administrative Region shall deal on its own with 
financial matters, including disposing of its financial resources and drawing up 
its budgets and its final accounts. The Hong Kong Special Administrative 
Region shall report its budgets and final accounts to the Central People's 
Government for the record. 

The Central People's Government shall not levy taxes on the Hong Kong 
Special Administrative Region. The Hong Kong Special Administrative Region 
shall use its financial revenues exclusively for its own purposes and they shall 
not be handed over to the Central People's Government. The systems by which 
taxation and public expenditure must be approved by the legislature, and by 
which there is accountability to the legislature for all public expenditure, and 
the system for auditing public accounts shall be maintained. 

17 



VI 

The Hong Kong Special Administrative Region shall maintain the capitalist 
economic and trade systems previously practised in Hong Kong. The Hong 
Kong Special Administrative Region Government shall decide its economic 
and trade policies on its own. Rights concerning the ownership of property, 
including those relating to acquisition, use. disposal, inheritance and compensa- 
tion for lawful deprivation (corresponding to the real value of the property 
concerned, freely convertible and paid without undue delay) shall continue to be 
protected by law. 

The Hong Kong Special .Administrative Region shall retain the status of a 
free port and continue a free trade policy, including the free movement of goods 
and capital. The Hong Kong Special Administrative Region may on its own 
maintain and develop economic and trade relations with all states and regions. 

The Hong Kong Special Administrative Region shall be a separate customs 
territory. It may participate in rele\ant international organisations and inter- 
national trade agreements (including preferential trade arrangements), such as 
the General Agreement on Tariffs and Trade and arrangements regarding 
international trade in textiles. Export quotas, tariff preferences and other 
similar arrangements obtained by the Hong Kong Special Administrative 
Region shall be enjoyed exclusively by the Hong Kong Special Administrative 
Region. The Hong Kong Special Administrative Region shall have authority to 
issue its own certificates of origin for products manufactured locally, in 
accordance with prevailing rules of origin. 

The Hong Kong Special Administrative Region may, as necessary, establish 
official and semi-official economic and trade missions in foreign countries, 
reporting the establishment of such missions to the Central People's Govern- 
ment for the record. 



VII 

The Hong Kong Special Administrative Region shall retain the status of an 
international financial centre. The monetary and financial systems previously 
practised in Hong Kong, including the systems oi' regulation and supervision 
of deposit taking institutions and financial markets, shall be maintained. 

The Hong Kong Special Administrative Region Government may decide its 
monetary and financial policies on its own. It shall safeguard the free operation 
of financial business and the free flow of capital within, into and out of the 
Hong Kong Special Administrative Region. No exchange control policy shall 
be applied in the Hong Kong Special Administrative Region. Markets for 
foreign exchange, gold, securities and futures shall continue. 

18 



The Hong Kong dollar, as the local legal tender, shall continue to circulate 
and remain freely convertible. The authority to issue Hong Kong currency 
shall be vested in the Hong Kong Special Administrative Region Government. 
The Hong Kong Special Administrative Region Government may authorise 
designated banks to issue or continue to issue Hong Kong currency under 
statutory authority, after satisfying itself that any issue of currency will be 
soundly based and that the arrangements for such issue are consistent with The 
object of maintaining the stability of the currency. Hong Kong currency bearing 
references inappropriate to the status of Hong Kong as a Special Administrative 
Region of the People's Republic of China shall be progressively replaced and 
withdrawn from circulation. 

The Exchange Fund shall be managed and controlled by the Hong Kong 
Special Administrative Region Government, primarily for regulating the ex- 
change value of the Hong Kong dollar. 



VIII 

The Hong Kong Special Administrative Region shall maintain Hong Kong's 
previous systems of shipping management and shipping regulation, including 
the system for regulating conditions of seamen. The specific functions and 
responsibilities of the Hong Kong Special Administrative Region Government 
in the field of shipping shall be defined by the Hong Kong Special Adminis- 
trative Region Government on its own. Private shipping businesses and 
shipping-related businesses and private container terminals in Hong Kong may 
continue to operate freely. 

The Hong Kong Special Administrative Region shall be authorised by the 
Central People's Government to continue to maintain a shipping register and 
issue related certificates under its own legislation in the name of "Hong Kong, 
China". 

With the exception of foreign warships, access for which requires the 
permission of the Central People's Government, ships shall enjoy access to the 
ports of the Hong Kong Special Administrative Region in accordance with the 
laws of the Hong Kong Special Administrative Region. 



IX 

The Hong Kong Special Administrative Region shall maintain the status 
of Hong Kong as a centre of international and regional aviation. Airlines 
incorporated and having their principal place of business in Hong Kong and 
civil aviation related businesses may continue to operate. The Hong Kong 
Special Administrative Region shall continue the previous system of civil 

19 



aviation management in Hong Kong, and keep its own aircraft register in 
accordance with provisions laid down by the Central People's Government 
concerning nationality marks and registration marks of aircraft. The Hong 
Kong Special Administrative Region shall be responsible on its own for matters 
of routine business and technical management of civil aviation, including the 
management of airports, the provision of air trallic services within the flight 
information region of the Hong Kong Special Administrative Region, and the 
discharge of other responsibilities allocated under the regional air navigation 
procedures of the International Civil Aviation Organisation. 

The Central People's Government shall, in consultation with the Hong Kong 
Special Administrative Region Government, make arrangements providing for 
air services between the Hong Kong Special Administrative Region and other 
parts of the People's Republic of China for airlines incorporated and having 
their principal place of business in the Hong Kong Special Administrative 
Region and other airlines of the People's Republic of China. All Air Service 
Agreements providing for air services between other parts of the People's 
Republic of China and other states and regions with stops at the Hong Kong 
Special Administrative Region and air services between the Hong Kong Special 
Administrative Region and other states and regions with stops at other parts of 
the People's Republic of China shall be concluded by the Central People's 
Government. For this purpose, the Central People's Government shall take 
account of the special conditions and economic interests of the Hong Kong 
Special Administrative Region and consult the Hong Kong Special Adminis- 
trative Region Government. Representatives of the Hong Kong Special 
Administrative Region Government may participate as members of delegations 
of the Government of the People's Republic of China in air service consultations 
with foreign governments concerning arrangements for such services. 

Acting under specific authorisations from the Central People's Government, 
the Hong Kong Special Administrative Region Government may: 

- renew or amend Air Service Agreements and arrangements previously in 
force; in principle, all such Agreements and arrangements may be renewed 
or amended with the rights contained in such previous Agreements and 
arrangements being as far as possible maintained; 

- negotiate and conclude new Air Service Agreements providing routes for 
airlines incorporated and having their principal place of business in the 
Hong Kong Special Administrative Region and rights for overflights and 
technical stops; and 

- negotiate and conclude provisional arrangements where no Air Service 
Agreement with a foreign state or other region is in force. 

All scheduled air services to, from or through the Hong Kong Special Adminis- 
trative Region which do not operate to. from or through the mainland of 
China shall be regulated by Air Service Agreements or provisional arrangements 
referred to in this paragraph. 

20 



The Central People's Government shall give the Hong Kong Special Adminis- 
trative Region Government the authority to: 

- negotiate and conclude with other authorities all arrangements concerning 
the implementation of the above Air Service Agreements and provisional 
arrangements; 

- issue licences to airlines incorporated and having their principal place of 
business in the Hong Kong Special Administrative Region; 

- designate such airlines under the above Air Service Agreements and 
provisional arrangements; and 

- issue permits to foreign airlines for services other than those to. from or 
through the mainland of China. 



The Hong Kong Special Administrative Region shall maintain the educa- 
tional system previously practised in Hong Kong. The Hong Kong Special 
Administrative Region Government shall on its own decide policies in the fields 
of culture, education, science and technology, including policies regarding the 
educational system and its administration, the language of instruction, the 
allocation of funds, the examination system, the system of academic awards and 
the recognition of educational and technological qualifications. Institutions of 
all kinds, including those run by religious and community organisations, may 
retain their autonomy. They may continue to recruit staff and use teaching 
materials from outside the Hong Kong Special Administrative Region. Students 
shall enjoy freedom of choice of education and freedom to pursue their 
education outside the Hong Kong Special Administrative Region. 



XI 



Subject to the principle that foreign affairs are the responsibility of the 
Central People's Government, representatives of the Hong Kong Special 
Administrative Region Government may participate, as members of delegations 
of the Government of the People's Republic of China, in negotiations at the 
diplomatic level directly affecting the Hong Kong Special Administrative Region 
conducted by the Central People's Government. The Hong Kong Special 
Administrative Region may on its own, using the name "Hong Kong. China", 
maintain and develop relations and conclude and implement agreements with 
states, regions and relevant international organisations in the appropriate fields, 

21 



including ihc economic, trade, linancial and nionclary. shipping, communica- 
tions, touristic, cultural and sporting fields. Representatives of the Hong Kong 
Special Administrative Region Government may participate, as members of 
delegations of the Government of the People's Republic of China, in interna- 
tional organisations or conferences in appropriate fields limited to slates and 
affecting the Hong Kong Special Adminislrali\c Region, or may attend in such 
other capacity as may be permitted by the Central People's Government and the 
organisation or conference concerned, and may express their views in the name 
of "Hong Kong. China". The Hong Kong Special Administrative Region may, 
using the name "Hong Kong. China", participate in international organisations 
and conferences not limited to states. 

The application to the Hong Kong Special Administrative Region of interna- 
tional agreements to which the People'sRcpublic of China is or becomes a party 
shall be decided by the Central People's Government, in accordance with the 
circumstances and needs of the Hong Kong Special Administrative Region, and 
after seeking the views of the Hong Kong Special Administrative Region 
Government. International agreements to which the People's Republic of China 
is not a party but which are implemented in Hong Kong may remain 
implemented in the Hong Kong Special Administrative Region. The Central 
People's Government shall, as necessary, authorise or assist the Hong Kong 
Special Administrative Region Government to make appropriate arrangements 
for the application to the Hong Kong Special Administrative Region of other 
relevant international agreements. The Central People's Government shall take 
the necessary steps to ensure that the Hong Kong Special Administrative 
Region shall continue to retain its status in an appropriate capacity in those 
international organisations of which the People's Republic of China is a member 
and in which Hong Kong participates in one capacity or another. The Central 
People's Government shall, where necessary, facilitate the continued participa- 
tion of the Hong Kong Special Administrative Region in an appropriate 
capacity in those international organisations in which Hong Kong is a partici- 
pant in one capacity or another, but of which the People's Republic of China is 
not a member. 

Foreign consular and other official or semi-official missions may be estab- 
lished in the Hong Kong Special Administrative Region with the approval of 
the Central People's Government. Consular and other official missions estab- 
lished in Hong Kong by states which have established formal diplomatic 
relations with the People's Republic of China may be maintained. According to 
the circumstances of each case, consular and other official missions of states 
having no formal diplomatic relations with the People's Republic of China 
may either be maintained or changed to semi-official missions. States not 
recognised by the People's Republic of China can only establish non-govern- 
mental institutions. 

The United Kingdom may establish a Consulate-General in the Hong Kong 
Special Administrative Region. 

22 



XII 

The maintenance of public order in the Hong Kong Special Administrative 
Region shall be the responsibility of the Hong Kong Special Administrative 
Region Government. Military forces sent by the Central People's Government 
10 be stationed in the Hong Kong Special Administrative Region for the 
purpose of defence shall not interfere in the internal affairs of the Hong Kong 
Special Administrative Region. Expenditure for these military forces shall be 
borne by the Central People's Government. 



XIII 

The Hong Kong Special Administrative Region Government shall protect the 
rights and freedoms of inhabitants and other persons in the Hong Kong Special 
Administrative Region according to law. The Hong Kong Special Administra- 
tive Region Government shall maintain the rights and freedoms as provided for 
by the laws previously in force in Hong Kong, including freedom of the person, 
of speech, of the press, of assembly, of association, to form and join trade 
unions, of correspondence, of travel, of movement, of strike, of demonstration. 
of choice of occupation, of academic research, of belief, inviolability of the 
home, the freedom to marry and the right to raise a family freely. 

Every person shall have the right to confidential legal advice, access to the 
courts, representation in the courts by lawyers of his choice, and to obtain 
judicial remedies. Every person shall have the right to challenge the actions of 
the executive in the courts. 

Religious organisations and believers may maintain their relations with 
religious organisations and believers elsewhere, and schools, hospitals and 
welfare institutions run by religious organisations may be continued. The 
relationship between religious organisations in the Hong Kong Special Adminis- 
trative Region and those in other parts of the People's Republic of China shall 
be based on the principles of non-subordination, non-interference and mutual 
respect. 

The provisions of the International Covenant on Civil and Political Rights 
and the International Covenant on Economic. Social and Cultural Rights as 
applied to Hong Kong shall remain in force. 



XIV 

The following categories of persons shall have the right of abode in the Hong 
Kong Special Administrative Region, and, in accordance with the law of the 

23 



Hong Kong Special Administrative Region, be qualilied to obtain permanent 
identity cards issued by the Hong Kong Special Administrative Region Govern- 
ment, which state their right of abode: 

- all Chinese nationals who were born or who have ordinarily resided in 
Hong Kong before or after the establishment of the Hong Kong Special 
Administrative Region for a continuous period of 7 years or more, and 
persons of Chinese nationality born outside Hong Kong of such Chinese 
nationals; 

- all other persons who have ordinarily resided in Hong Kong before or 
after the establishment of the Hong Kong Special Administrative Region 
for a continuous period of 7 years or more and who have taken Hong 
Kong as their place of permanent residence before or after the establish- 
ment of the Hong Kong Special Administrative Region, and persons 
under 21 years of age who were born of such persons in Hong Kong 
before or after the establishment of the Hong Kong Special Administrative 
Region; 

- any other persons who had the right of abode only in Hong Kong before 
the establishment of the Hong Kong Special Administrative Region. 

The Central People's Government shall authorise the Hong Kong Special 
Administrative Region Government to issue, in accordance with the law, 
passports of the Hong Kong Special Administrative Region of the People's 
Republic of China to all Chinese nationals who hold permanent identity cards 
of the Hong Kong Special Administrative Region, and travel documents of the 
Hong Kong Special Administrative Region of the People's Republic of China to 
all other persons lawfully residing in the Hong Kong Special Administrative 
Region. The above passports and documents shall be valid for all states and 
regions and shall record the holder's right to return to the Hong Kong Special 
Administrative Region. 

For the purpose of travelling to and from the Hong Kong Special Adminis- 
trative Region, residents of the Hong Kong Special Administrative Region may 
use travel documents issued by the Hong Kong Special Administrative Region 
Government, or by other competent authorities of the People's Republic of 
China, or of other states. Holders of permanent identity cards of the Hong 
Kong Special Administrative Region may have this fact stated in their travel 
documents as evidence that the holders have the right of abode in the Hong 
Kong Special Administrative Region. 

Entry into the Hong Kong Special Administrative Region of persons from 
other parts of China shall continue to be regulated in accordance with the 
present practice. 

The Hong Kong Special Administrative Region Government may apply 
immigration controls on entry, stay in and departure from the Hong Kong 
Special Administrative Region by persons from foreign states and regions. 

24 



Unless restrained by law, holders of valid travel documents shall be free 
to leave the Hong Kong Special Administrative Region without special 
authorisation. 

The Central People's Government shall assist or authorise the Hong Kong 
Special Administrative Region Government to conclude visa abolition agree- 
ments with states or regions. 



25 



ANNEX II 
SINO-BRITISH JOINT LIAISON CROLP 

1. In furtherance of their common aim and in order to ensure a smooth transfer 
of government in 1997. the Government of the United Kingdom and the 
Government of the People's Republic of China have agreed to continue their 
discussions in a friendly spirit and to develop the cooperative relationship which 
already exists between the two Governments over Hong Kong with a view to the 
effective implementation of the Joint Declaration. 

2. In order to meet the requirements for liaison, consultation and the exchange of 
information, the two Governments have agreed to set up a Joint Liaison Group. 

3. The functions of the Joint Liaison Group shall be: 

(a) to conduct consultations on the implementation of the Joint Declaration; 

(b) to discuss matters relating to the smooth transfer of government in 1997: 

(c) to exchange information and conduct consultations on such subjects as 
may be agreed by the two sides. 

Matters on which there is disagreement in the Joint Liaison Group shall be 
referred to the two Governments for solution through consultations. 

4. Matters for consideration during the first half of the period between the 
establishment of the Joint Liaison Group and 1 July 1997 shall include: 

(a) action to be taken by the two Governments to enable the Hong Kong 
Special Administrative Region to maintain its economic relations as a 
separate customs territory, and in particular to ensure the maintenance 
of Hong Kong's participation in the General Agreement on Tariffs and 
Trade, the Multifibre Arrangement and other international arrange- 
ments; and 

(b) action to be taken by the two Governments to ensure the continued 
application of international rights and obligations affecting Hong Kong. 

5. The two Governments have agreed that in the second half of the period 
between the establishment of the Joint Liaison Group and 1 July 1997 there will 
be need for closer cooperation, which will therefore be intensified during that 
period. Matters for consideration during this second period shall include: 

(a) procedures to be adopted for the smooth transition in 1997: 

(b) action to assist the Hong Kong Special .Administrative Region to 
maintain and develop economic and cultural relations and conclude 
agreements on these matters with states, regions and relevant interna- 
tional organisations. 

6. The Joint Liaison Group shall be an organ for liaison and not an organ of 
power. It shall play no part in the administration of Hong Kong or the Hong 
Kong Special Administrative Region. Nor shall it have any supervisory role 

26 



over that administration. The members and supporting staff of the Joint Liaison 
Group shall only conduct activities within the scope of the functions of the Joint 
Liaison Group. 

7. Each side shall designate a senior representative, who shall be of Ambass- 
adorial rank, and four other members of the group. Each side may send up to 
20 supporting staff. 

8. The Joint Liaison Group shall be established on the entry into force of the 
Joint Declaration. From 1 July 1988 the Joint Liaison Group shall have its 
principal base in Hong Kong. The Joint Liaison Group shall continue its work 
until 1 January 2000. 

9. The Joint Liaison Group shall meet in Beijing. London and Hong Kong. It 
shall meet at least once in each of the three locations in each year. The venue for 
each meeting shall be agreed between the two sides. 

10. Members of the Joint Liaison Group shall enjoy diplomatic privileges and 
immunities as appropriate when in the three locations. Proceedings of the Joint 
Liaison Group shall remain confidential unless otherwise agreed between the 
two sides. 

1 1. The Joint Liaison Group may by agreement between the two sides decide to 
set up specialist sub-groups to deal with particular subjects requiring expert 
assistance. 

12. Meetings of the Joint Liaison Group and sub-groups may be attended by 
experts other than the members of the Joint Liaison Group. Each side shall 
determine the composition of its delegation to particular meetings of the Joint 
Liaison Group or sub-group in accordance with the subjects to be discussed and 
the venue chosen. 

13. The working procedures of the Joint Liaison Group shall be discussed and 
decided upon by the two sides within the guidelines laid down in this Annex. 



27 



ANNEX III 

LAND LEASES 

The Government of the United Kingdom and the Government of the People's 
Republic of China have agreed that, with efTect from the entry into force of the 
Joint Declaration, land leases in Hong Kong and other related matters shall be 
dealt with in accordance with the following provisions: 

L All leases of land granted or decided upon before the entry into force of the 
Joint Declaration and those granted thereafter in accordance with paragraph 
2 or 3 of this Annex, and which extend beyond 30 June 1997. and all rights in 
relation to such leases shall continue to be recognised and protected under the 
law of the Hong Kong Special Administrative Region. 

2. All leases of land granted by the British Hong Kong Government not 
containing a right of renewal that expire before 30 June 1997, except short term 
tenancies and leases for special purposes, may be extended if the lessee so wishes 
for a period expiring not later than 30 June 2047 without payment of an 
additional premium. An annual rent shall be charged from the date of extension 
equivalent to 3 per cent of the rateable value of the property at that date, 
adjusted in step with any changes in the rateable value thereafter. In the case of 
old schedule lots, village lots, small houses and similar rural holdings, where the 
property was on 30 June 1984 held by, or. in the case of small houses granted 
after that date, the property is granted to, a person descended through the male 
line from a person who was in 1898 a resident of an established village in Hong 
Kong, the rent shall remain unchanged so long as the property is held by that 
person or by one of his lawful successors in the male line. Where leases of land 
not having a right of renewal expire after 30 June 1997, they shall be dealt with 
in accordance with the relevant land laws and policies of the Hong Kong Special 
Administrative Region. 

3. From the entry into force of the Joint Declaration until 30 June 1997. new 
leases of land may be granted by the British Hong Kong Government for terms 
expiring not later than 30 June 2047. Such leases shall be granted at a premium 
and nominal rental until 30 June 1997, after which date they shall not require 
payment of an additional premium but an annual rent equivalent to 3 per cent 
of the rateable value of the property at that date, adjusted in step with changes 
in the rateable value thereafter, shall be charged. 

4. The total amount of new land to be granted under paragraph 3 of this Annex 
shall be limited to 50 hectares a year (excluding land to be granted to the Hong 
Kong Housing Authority for public rental housing) from the entry into force of 
the Joint Declaration until 30 June 1997. 

5. Modifications of the conditions specified in leases granted by the British 
Hong Kong Government may continue to be granted before 1 July 1997 at a 
premium equivalent to the difference between the value of the land under the 
previous conditions and its value under the modified conditions. 

28 



6. From the entry into force of the Joint Declaration until 30 June 1997, 
premium income obtained by the British Hong Kong Government from land 
transactions shall, after deduction of the average cost of land production, be 
shared equally between the British Hong Kong Government and the future 
Hong Kong Special Administrative Region Government. All the income 
obtained by the British Hong Kong Government, including the amount of the 
above mentioned deduction, shall be put into the Capital Works Reserve Fund 
for the financing of land development and public works in Hong Kong. The 
Hong Kong Special Administrative Region Government's share of the premium 
income shall be deposited in banks incorporated in Hong Kong and shall not be 
drawn on except for the financing of land development and public works in 
Hong Kong in accordance with the provisions of paragraph l{d) of this Annex. 

7. A Land Commission shall be established in Hong Kong immediately upon 
the entry into force of the Joint Declaration. The Land Commission shall be 
composed of an equal number of officials designated respectively by the 
Government of the United Kingdom and the Government of the People's 
Republic of China together with necessary supporting staff. The officials of the 
two sides shall be responsible to their respective governments. The Land 
Commission shall be dissolved on 30 June 1997. 

The terms of reference of the Land Commision shall be: 

(a) to conduct consultations on the implementation of this Annex; 

(b) to monitor observance of the limit specified in paragraph 4 of this 
Annex, the amount of land granted to the Hong Kong Housing 
Authority for public rental housing, and the division and use of premium 
income referred to in paragraph 6 of this Annex; 

(c) to consider and decide on proposals from the British Hong Kong 
Government for increasing the limit referred to in paragraph 4 of this 
Annex; 

(d) to examine proposals for drawing on the Hong Kong Special Admin- 
istrative Region Government's share of premium income referred to in 
paragraph 6 of this Annex and to make recommendations to the Chinese 
side for decision. 

Matters on which there is disagreement in the Land Commission shall be 
referred to the Government of the United Kingdom and the Government of the 
People's Republic of China for decision. 

8. Specific details regarding the establishment of the Land Commission shall be 
finaHsed separately by the two sides through consultations. 



29 



EXCHANGE OF MEMORANDA 
(A) UNITED KINGDOM MEMORANDUM 

MEMORANDUM 

In connection with the Joint Declaration of the Government of the United 
Kingdom of Great Britain and Northern Ireland and the Government of the 
People's Republic of China on the question of Hong Kong to be signed this 
day, the Government of the United Kindgom declares that, subject to the 
completion of the necessary amendments to the relevant United Kingdom 
legislation: 

(a) All persons Vv'ho on 30 June 1997 are, by virtue of a connection with 
Hong Kong, British Dependent Territories citizens (BDTCs) under the 
law in force in the United Kingdom will cease to be BDTCs with effect 
from 1 July 1997, but will be eligible to retain an appropriate status 
which, without conferring the right of abode in the United Kingdom, 
will entitle them, to continue to use passports issued by the Government 
of the United Kingdom. This status will be acquired by such persons 
only if they hold or are included in such a British passport issued before 
1 July 1997, except that eligible persons born on or after 1 January 1997 
but before 1 July 1997 may obtain or be included in such a passport up 
to 31 December 1997. 

(b) No person will acquire BDTC status on or after 1 July 1997 by virtue 
of a connection with Hong Kong. No person born on or after 1 July 
1997 will acquire the status referred to as being appropriate in sub- 
paragraph (a). 

(c) United Kingdom consular officials in the Hong Kong Special Adminis- 
trative Region and elsewhere may renew and replace passports of 
persons mentioned in sub-paragraph (a) and may also issue them to 
persons, born before 1 July 1997 of such persons, who had previously 
been included in the passport of their parent. 

(d) Those who have obtained or been included in passports issued by the 
Government of the United Kingdom under sub-paragraphs (a) and (c) 
will be entitled to receive, upon request, British consular services and 
protection when in third countries. 



Beijing, 1984. 



31 



(B) CHINESE MEMORANDUM 
Translation 

MEMORANDUM 

The Government of the People's Republic of China has received the 
memorandum from the Government of the United Kingdom of Great Britain 
and Northern Ireland dated 1 984. 

Under the Nationality Law of the People's Republic of China, all Hong Kong 
Chinese compatriots, whether they are holders of the "British Dependent 
Territories citizens' Passport" or not, are Chinese nationals. 

Taking account of the historical background of Hong Kong and its realities, 
the competent authorities of the Government of the People's Republic of China 
will, with effect from 1 July 1997, permit Chinese nationals in Hong Kong who 
were previously called "British Dependent Territories citizens" to use travel 
documents issued by the Government of the United Kingdom for the purpose 
of travelling to other states and regions. 

The above Chinese nationals will not be entitled to British consular protection 
in the Hong Kong Special Administrative Region and other parts of the 
People's Republic of China on account of their holding the above-mentioned 
British travel documents. 



Beijing, 1984. 



33 



EXPLANATORY NOTES 

Introduction 

1. The following notes are intended to explain the material in the Annexes to 
the Joint Declaration and in the associated Exchange of Memoranda. They do 
not seek to be a comprehensive guide and do not include every point in the texts. 
They are designed to explain in simple terms, and to illustrate where appro- 
priate, how the Annexes provide for the continuation of the essentials of Hong 
Kong's systems. Hong Kong is a highly developed industrial, commercial and 
financial centre and as such is a complex place. The Hong Kong Government, in 
consultation with Her Majesty's Government, are taking steps to ensure that 
further guidance and answers to detailed questions will be provided as may be 
necessary and appropriate. 

Annex I: Elaboration by the Government of the People's Republic of China of its 
Basic Policies regarding Hong Kong 

Section I: Constitutional Arrangements and Government Structure 

2. When the People's Republic of China resumes the exercise of sovereignty 
over Hong Kong on 1 July 1997, Hong Kong will become a Special Administra- 
tive Region (SAR) of the People's Republic of China with a high degree of 
autonomy. A Basic Law to be enacted by the National People's Congress of the 
People's Republic of China will become the constitutional instrument for the 
Hong Kong SAR. The Letters Patent and the Royal Instructions, which have 
hitherto performed this function, will be revoked. As paragraph 3(12) of the 
Joint Declaration makes clear, the basic policies of the People's Republic of 
China as set out in the Joint Declaration and elaborated in this Annex will all be 
stipulated in the Basic Law. 

3. This section of the Annex makes clear the important point that the Basic 
Law will stipulate that the socialist system and socialist policies practised in 
the rest of the People's Republic of China will not be extended to the Hong 
Kong SAR and that Hong Kong's capitalist system and lifestyle will remain 
unchanged for 50 years after the establishment of the SAR. 

4. The Annex also states that, except in relation to foreign and defence affairs, 
which are now the overall responsibility of Her Majesty's Government, and will 
with effect from 1 July 1997 become the overall responsibility of the Central 
People's Government of the People's Republic of China, the Hong Kong SAR 
will enjoy a high degree of autonomy, including executive, legislative and 
independent judicial power. The SAR will also have authority to conduct its 
own external affairs in appropriate areas (including those relating to economic, 
trade, financial and monetary, shipping, communications, touristic, cultural 
and sporting matters) as amplified in section XI of this Annex, which deals with 

35 



external relations. The SAR will enjoy a significant degree of autonomy in the 
maintenance and development of its air transport system as set out in section IX 
of this Annex, which deals with civil aviation. 

5. The section of the Annex which deals with constitutional arrangements and 
government structure provides that the Hong Kong SAR will be under the 
direct authority o\' the Central People's Government. The SAR will therefore 
not be under the authority of any provincial Government. 

6. This section of the Annex lays down the main elements of the structure of 
government in the Hong Kong SAR. It also states thai the Government and 
legislature of the SAR will be composed of local inhabitants. The chief execu- 
tive will be selected by election or through consultations held locally and be 
appointed by the Central People's Government. Officials of the rank equivalent 
to Secretaries will be nominated by the chief executive and appointed by the 
Central People's Government. The legislature will be elected. 

7. Furthermore the Annex indicates that the executive authorities will be 
required to act in accordance with the law and will be accountable to the 
legislature; that both Chinese and English languages may be used in govern- 
ment and in the courts; and that, apart from the national flag and national 
emblem of the People's Republic of China, the SAR may use a regional flag 
and emblem of its own. 

Section II: The Laws 

8. This section of the Annex, which describes how the Hong Kong SAR will 
have its own system of laws, provides continuity of Hong Kong law beyond 
1997. The law of the SAR will include the common law and laws passed by the 
legislature of the SAR. It will remain, as now. capable of adapting to changing 
conditions and will be free to take account of developments in the common law 
elsewhere. That this is so is reinforced by specific provisions in section III of this 
Annex providing that the courts of the SAR will be able to refer to precedents in 
other common law jurisdictions, that judges of the SAR may be recruited from 
other common law jurisdictions and that the SAR's court of final appeal may 
invite judges from other common law jurisdictions to sit on it. 

9. Hong Kong laws and those enacted after 1 July 1997 by the legislature of the 
Hong Kong SAR will be valid unless they contravene the Basic Law. The 
policies stated in the Joint Declaration and in this Annex will be stipulated in 
the Basic Law. 

10. Laws enacted in the Hong Kong SAR will, as now. have to be passed by the 
legislature, or under its authority in the form of delegated legislation. Such laws 
may amend the laws of Hong Kong carried over in 1997 so long as the 
provisions of the Basic Law are not transgressed. After enactment, laws will 
have to be reported to the Standing Committee of the National People's 
Congress of the People's Republic of China for the record. 

36 



Section III: The Judicial System 

11. The courts of Hong Kong consist of the Supreme Court, the District 
Courts, the Magistrates' Courts, and various statutory tribunals. The courts are 
at the heart of Hong Kong's legal system, which plays an important role in 
maintaining the stability and prosperity of Hong Kong. The Annex contains the 
very important provision for continuity of the judicial system. 

12. The Annex indicates that the main change in the judicial system which will 
take place is the abolition of the system of appeal to the Privy Council and the 
substitution of arrangements for the final adjudication of disputes by a court of 
the Hong Kong SAR. 

13. The independent exercise of judicial power and the obligation of the courts 
to decide cases in accordance with the law are both provided for in this section 
of the Annex. It also provides that the appointment of judges in the Hong Kong 
SAR will be subject to the recommendation of an independent commission 
similar to the existing Judicial Service Commission. The independence of the 
judiciary is protected by the provisions that judges of the SAR may only be 
removed from office on the grounds of inability or misbehaviour, and then only 
on the recommendation of a tribunal of judges of the SAR. 

14. The Annex provides that the essentials of the system of appointment and 
removal of judges will remain unchanged, but the appointment and removal of 
judges of the highest rank will require the endorsement of the legislature of the 
Hong Kong SAR and have to be reported for the record to the Standing 
Committee of the National People's Congress. 

15. At present the decision whether or not to prosecute in any particular case is 
the responsibility of the Attorney General. That responsibility is exercised 
independently free from government interference. The Annex provides that the 
responsibility will continue to be exercised in the SAR in the same independent 
way. 

16. The Annex provides that local lawyers and also lawyers from outside Hong 
Kong, who contribute greatly both to the strength of the present legal system 
and to the success of Hong Kong as a commercial and financial centre, will 
continue to be able to practise law in Hong Kong. Provision is also made 
to enable arrangements to be continued whereby, for example, judgments 
obtained in Hong Kong may be enforced in foreign states, and evidence may 
be obtained overseas for use in proceedings in Hong Kong. 

Section IV: The Public Service 

17. This section of the Annex provides for the continuation in Hong Kong of 
an impartial, stable and effective public service. This is an essential factor in 
ensuring Hong Kong's future stability and prosperity. 

37 



18. Under the provisions of this section of the Annex serving officers will be 
able to continue in employment with the Hong Kong SAR Government on 
terms and conditions, including pay and pensions, no less favourable than 
before 1 July 1997. Special commissions dealing with pay and conditions of 
service will be retained. In addition, appointments and promotions will be made 
on the recommendations of a public service commission and on the basis of 
qualifications, experience and ability. 

19. The Annex states that the Hong Kong SAR may employ foreign nationals 
in a number of capacities, namely as public officers (except at the highest levels), 
as advisers and in professional and technical posts. 

20. It is explicitly provided that all pensions and other benefits due to those 
officers leaving the public service before or after 1 July 1997 or to their depend- 
ants will be paid by the Hong Kong SAR Government. 

Section V: The Financial System 

21. This section of the Annex provides for continuity in that the Government of 
the Hong Kong SAR will determine its own fiscal policy and manage and 
dispose of its financial resources, in accordance with Hong Kong"s own needs. 
There will be no requirement to remit revenue to the Central People's Govern- 
ment. The Annex also makes clear that the predominant authority of the 
legislature in financial matters, and the system for independent and impartial 
audit of public accounts, will continue unchanged. 

Section VI: The Economic System and External Economic Relations 

11. The Annex deals together with these two subjects, which are both important 
for Hong Kong's export-oriented economy. Hong Kong's prosperity is heavily 
dependent on securing continued access to its principal export markets in the 
developed world. This section of the Annex provides reassurance both to the 
community at large in Hong Kong and to its trading partners that the basis for 
Hong Kong's flourishing tYee market economy will continue. It also ensures 
that Hong Kong's distinct position within the international trading community, 
on the basis of which Hong Kong enjoys its present rights of access, will continue. 

23. The Annex provides for: 

{a) Hong Kong's right to continue to determine its economic policies, 
including trade policy, in accordance with its own needs; 

[h) the continuation of the free enterprise system, the free trade policies and 
the free port, which are the essentials of Hong Kong's consistent and 
successful economic policies; 

(c) the continuation of individual rights and freedoms in economic matters, 
notably the freedoms of choice of occupation, of travel and of movement 
of capital, and the rights of individuals and companies to own and 
dispose of property. 

38 



All these essential requirements are met in this section of the Annex, read in 
conjunction with the appropriate paragraphs of section XIII, which deals with 
rights and freedoms. The right of the future Hong Kong SAR to decide its own 
economic policies is an essential part of the "one country, two systems'" concept. 

24. Hong Kong's participation in the General Agreement on Tariffs and Trade 
(GATT), through which it enjoys most favoured nation treatment in its major 
markets, has been an important element in its success as an exporter. Even in 
textiles and clothing, where the free trade principles of the GATT have been 
modified by the Multi-Fibre Arrangement (MFA) which is a negotiated 
derogation from the normal GATT rules. Hong Kong is able to develop its 
trade within the MFA and the bilateral agreements negotiated under its 
provisions. What is even more important. Hong Kong plays an active role in the 
GATT and the MFA. The continuation of Hong Kong"s participation in the 
GATT and the MFA (if the latter is extended beyond 1986. in which year it 
expires) is, therefore, of prime importance: and that too is provided in this 
section of the Annex. 

Section VII: The Monetary System 

25. A freely convertible currency and the right to manage the Exchange Fund, 
which provides the backing for the note issue and is used to regulate the 
exchange value of the currency, are the essential elements of Hong Kong's 
monetary system. This section of the Annex clearly stipulates that these 
essential elements shall be maintained. 

26. This section of the Annex also provides for the continuation of the arrange- 
ments by which currency is issued locally by designated banks under statutory 
authority. 

27. The changes to the designs of bank notes and coins provided for in this 
section are a logical consequence of the fact that Hong Kong will become a 
Special Administrative Region of the People's Republic of China on 1 July 
1997. 

Section VIII: Shipping 

28. A major factor in Hong Kong's trading success is its well-developed deep 
water port and the capacity to handle cargoes by up to date methods. Hong 
Kong's position as a major shipping centre will be preserved by this section of 
the Annex, which provides that systems of shipping management and shipping 
regulation will continue. Private shipping businesses and shipping-related 
businesses, including container terminals, may continue to operate freely. 

29. The Annex states that the Hong Kong SAR will have its own shipping 
register and will issue certificates in the name of "Hong Kong. China". 

30. The Annex also provides that merchant shipping will have free access to the 
ports of Hong Kong under the laws of the SAR. 

39 



Section IX: Civil Aviation 

31. This section of the Annex makes clear that Hong Kong will continue as a 
major centre of regional and international air services, and that airlines and civil 
aviation related businesses will be able to continue operating. 

32. Under the provisions of the Annex the Central People's Government of the 
People's Republic of China will negotiate agreements concerning air services 
from and to other points in China through the Hong Kong SAR. However there 
is also a provision that in dealing with such arrangements the Central People's 
Government will consult the SAR Government, take its interests into account 
and include its representatives in delegations to air service consultations with 
foreign governments. By virtue of section XI of the Annex, which deals with 
external relations, such representatives may also be included in delegations to 
appropriate international organisations. The Central People's Government will 
also consult the Hong Kong SAR Government about arrangements for air 
services between the SAR and other parts of China. 

33. It is clearly provided that all scheduled air services touching the Hong Kong 
SAR which do not touch the mainland of China will be regulated by separate 
arrangements concluded by the SAR Government. For this purpose the SAR 
Government will be given specific authorisations from the Central People's 
Government to negotiate with foreign states and regions its own bilateral 
arrangements regulating air services. These will as far as possible maintain the 
rights previously enjoyed by Hong Kong. The SAR Government will also act 
under a general authority from the Central People's Government in negotiating 
all matters concerning the implementation of such bilateral arrangements and 
will issue its own operating permits for air services provided under these 
arrangements. The Annex also states that the SAR will have the authority to 
license local airlines, to keep its own aircraft register, to conduct the technical 
supervision of civil aviation and to manage airports in the SAR. In addition the 
general provisions in section II of the Annex, which deals with the laws of the SAR. 
provide for continuity of previously existing civil aviation laws beyond 1997. 

34. Hong Kong's civil aviation industry will thus be able to continue to 
make an important contribution to the effective functioning of Hong Kong's 
economy in terms of servicing the needs of both business and tourism. 

Section X: Culture and Education 

35. This section of the Annex makes clear that Hong Kong's own system of 
education will be continued and that it will operate separately and differently 
from that in other parts of China. Although most of the funds for education in 
Hong Kong are provided by the Government, many educational institutes were 
founded and are run by community and religious organisations. Explicit 
provision is made for this system to be maintained. 

36. This section also provides for continuity in the application of present 
educational standards, in the use of teaching materials from overseas and in the 

40 



freedom to pursue education outside Hong Kong. It therefore provides a sound 
basis for Hong Kong to continue to develop an educational system which will 
ensure that the population will have the skills and expertise required to enable 
Hong Kong to maintain and improve its position in the fiercely competitive 
economic and trading environment within which Hong Kong operates. 

37. Hong Kong has come to enjoy a varied cultural and intellectual life. This 
and other sections of the Annex provide for the present unique mix of cultural 
and intellectual influences to continue. Provision is made in section XI of the 
Annex, which deals with external relations, for Hong Kong to continue to 
participate in international sporting events. 

Section XI: External Relations 

38. This section of the Annex provides that, subject to the principle that foreign 
affairs are the responsibility of the Central People's Government, the Hong 
Kong SAR will manage on its own certain aspects of its external relations, in 
particular those in the economic field. This is particularly important, since 
Hong Kong's access to its principal overseas markets in the industrialised 
world, which is crucial to Hong Kong's industry, depends upon recognition of 
the separate nature of these interests. 

39. In keeping with the general provisions for Hong Kong to be a Special 
Administrative Region under Chinese sovereignty, overall responsibility for 
foreign affairs will lie with the Central People's Government, just as overall 
responsibility for these matters at present lies with Her Majesty's Government 
in the United Kingdom. At the same time the Hong Kong SAR will be able, 
under the provisions of this section of the Annex, to look after its own particular 
interests in certain areas by virtue of the power to be given to it to conclude 
agreements in appropriate fields and to be represented in the delegation of 
the People's Republic of China at negotiations of direct concern to Hong Kong. 

40. The detailed method by which the provisions of the second paragraph of 
this section of the Annex, which deals with the application to the Hong Kong 
S.'^R of international agreements, will be implemented will have to be worked 
out during the transitional period and will be one of the matters to be considered 
by the Joint Liaison Group. There is a very large number of international 
agreements which apply to Hong Kong and whose continued application 
following the establishment of the Hong Kong SAR will need to be secured. 
This will require consultation with third countries. 

41. The Annex provides for continuity of representation by all foreign states 
and organisations currently represented in Hong Kong, subject to the approval 
of the Central People's Government. Changes to the status of such missions 
may be required in order to take account of the existence or otherwise of 
formal relations between the People's Republic of China and a particular state. 
The United Kingdom will be represented in Hong Kong bv a Consul-General 
after 1 July 1997. 

41 



Section XII: Defence. Security and Public Order 

42. With the estabhshmcnt of the Hong Kong SAR. the British garrison will be 
withdrawn and the Central People's Government of the People's Republic of 
China will be responsible for the SAR's defence. This section of the Annex 
makes clear that the maintenance of public order in the SAR will be the SAR 
Government's responsibility. It is also stated that military forces sent by the 
Central People's Government to be stationed in the SAR for the purpose of 
defence will not interfere in its internal affairs, and that expenditure for these 
military forces will be borne by the Central People's Government. 

Section XIII: Rights and Freedoms 

43. This section of the Annex explains that basic rights and freedoms will be 
protected in the Hong Kong SAR. It covers this important subject without an 
extended description of the rights and freedoms concerned by providing: 

{a) that the rights and freedoms previously enjoyed under the laws of Hong 
Kong will be maintained by the SAR Government; and 

{b) that the provisions of the International Covenants on Civil and Political 
Rights and on Economic. Social and Cultural Rights, as they apply to 
Hong Kong, will continue to apply to the Hong Kong SAR. 

44. It is thus made clear that persons in the Hong Kong SAR will enjoy the 
same protection of the law against infringements of their basic rights as they did 
before the establishment of the SAR. 

45. While not restricting the range of rights and freedoms the text mentions 
specifically some of the more important rights and freedoms presently enjoyed 
under the law. 

46. The Covenants are too lengthy to reproduce here but they are public 
documents ^ They apply to Hong Kong, with certain reservations, and. in 
accordance with this section of the Annex, will continue to do so after 30 June 
1997. The Covenants were drafted by the United Nations Human Rights 
Commission and adopted by the United Nations General Assembly, and 
entered into force in 1976. They state a general consensus of nations on basic 
rights and identify in detail specific human rights and freedoms: including the 
right to work, to an adequate standard of living, to life and liberty, and freedom 
of expression, conscience, religion and association. 

47. The reservations entered by the United Kingdom in respect of the 
application of the Covenants to Hong Kong, which are also public, took 
account of the realities of the social and economic conditions in Hong Kong: for 
example, in relation to Hong Kong the United Kingdom made reservations 
relating to immigration and to the deportation of aliens. 

' Command 6702 Treaty Series No. 6 (1977) 

42 



Section XIV: Right of Abode, Travel Documents and Immigration 

48. This section concerns the right of abode in the Hong Kong SAR, the travel 
documents to be used by residents of the SAR, and immigration matters. It 
provides for a high degree of continuity in these areas consistent with the change 
in Hong Kong's status on 1 July 1997. 

49. The first paragraph defines the categories of people who will have the right 
of abode (including the right to enter, re-enter, live and work) in the Hong Kong 
SAR. These include: 

{a) Chinese nationals who were born in Hong Kong or have lived there 

continuously for at least 7 years; 
{b) Chinese nationals born outside Hong Kong to Chinese nationals who 

have the right of abode in Hong Kong; 
(c) all non-Chinese nationals who have lived in Hong Kong continuously 

for at least 7 years and who have taken it as their place of permanent 

residence; and 
{d) any others who had the right of abode only in Hong Kong before 1 July 

1997. 

Non-Chinese nationals born in Hong Kong to parents who have the right of 
abode there also have the right of abode but will retain it after the age of 21 only 
if they have met the requirements of seven years' residence and of taking Hong 
Kong as their place of permanent residence. The SAR Government will issue 
permanent identity cards to all those with the right of abode in the SAR. These 
cards will state the holder's right of abode. 

50. This section of the Annex states that Chinese nationals who have the 
right of abode in the Hong Kong SAR will be eligible for passports issued 
by the SAR Government. Other persons who have the right of abode, or 
are otherwise lawfully resident, in the SAR will be eligible for other travel 
documents issued by the SAR Government. Both these categories of persons 
may also use travel documents issued by the competent authorities of the 
People's Republic of China or by other governments to travel to and from 
the SAR: these include passports issued by the United Kingdom (see para- 
graphs 63 to 64 below). 

51. The Annex makes clear that the right to leave the Hong Kong SAR for any 
purpose, e.g. business, study or emigration, will be maintained subject to the 
normal exceptions under the law. To facilitate entry by SAR residents into third 
countries, all travel documents issued to them will either include a reference to 
their right to return to the SAR or refer to the fact that they hold a permanent 
identity card as evidence of their right of abode in the SAR. The SAR Govern- 
ment will be assisted or authorised by the Central People's Government to 
conclude agreements with states or regions which provide for the mutual 
abolition of visa requirements. 

43 



Annex II: Terms of Reference of the Sino-British Joint Liaison Croup 

52. As the Secretary of State for Foreign and Commonwealth Affairs em- 
phasised in his press conference in Hong Kong on 1 August 1984. it is fully 
agreed between Her Majesty's Government and the Chinese Government that 
Her Majesty's Government will remain responsible for the administration of 
Hong Kong until 30 June 1997. Nonetheless there will, of course, be a number 
of areas relating to the implementation of the Joint Declaration where further 
consultation between the two Governments will be required after the Joint 
Declaration has entered into force. One obvious example in the future is 
the arrangements for Hong Kong's continued participation in international 
agreements and organisations. Such consultation will be facilitated by the 
Sino-Brilish Joint Liaison Group, whose role and functions are clearly defined 
in Annex H. 

Annex III: Land Leases 

53. This Annex takes account of the important part which land plays in the 
development and economy of Hong Kong. 

54. It considers existing leases under two main categories: those which continue 
beyond 30 June 1997 and those which expire before that date. In the case of the 
first category (mainly 75 year leases renewable for 75 years, and 999 year leases) 
the rights in the leases are recognised by the Annex and will be recognised and 
protected under the lav/ of the SAR after 1997. These rights include the right of 
renewal in the case of renewable leases, as well as rights granted by the 
leaseholder to other persons, e.g. sub-leases, mortgages and rights of way. 

55. Leases which expire before 30 June 1997 (mainly New Territories leases and 
75 year non-renewable leases in the urban area) may be extended without 
premium until 2047. A rent of 3 per cent of current rateable value will be charged 
from the date of extension, e.xcept in the case of village land held by indigenous 
villagers who will continue to pay a nominal rent. 

56. New leases running until 2047 may be issued by the Hong Kong Govern- 
ment in the period up to 30 June 1997. These will continue to be issued under the 
existing system of land disposal (i.e. by public auction, tender or private treaty 
grant). A premium will be payable and a nominal rent will be charged up to 30 
June 1997. After that date, no additional premium will be payable but the rent 
will increase to 3 per cent of current rateable value. 

57. The concept of charging a rent on the basis of rateable values follows that 
used since 1973 to fix rents on the renewal of leases. It has, however, been agreed 
that the rent will be based on current rateable values (i.e. a rent which will 
change as rateable values change) rather than based, as at present, on a fi.xed 
reference point (i.e. a rent which is based on the rateable value at the date of 
renewal and w hich remains unchanged for the w hole term of the lease). 

44 



58. The amount of new land which may be granted by the Hong Kong Govern- 
ment will be limited to 50 hectares a year. The limit does not include land 
granted to the Housing Authority for the construction of public rental housing. 

59. Modifications of lease conditions will continue to be dealt with by the Hong 
Kong Government in accordance with existing practice. 

60. In recognition of the fact that leases which extend beyond June 1997 derive 
part of their value from the post-June 1997 portion of their term, the Annex 
provides for net premium income to be shared between the Hong Kong 
Government and the future SAR Government. 

61. A Land Commission, consisting of an equal number of officials appointed 
by Her Majesty's Government and the Chinese Government, will be set up. This 
Commission will monitor the implementation of the provisions in this Annex 
and will consider proposals for increasing the limit on the amount of new- 
land which may be granted and for drawing on the SAR Government's share 
of premium income. It will not, however, consider individual land cases, nor 
will it be involved in deciding who should be issued with new leases. The 
Commission will be dissolved on 30 June 1997. 

Associated Exchange of Memoranda 

62. The status after 30 June 1997 of persons who are now British Dependent 
Territories citizens, and related issues, are covered in two Memoranda to be 
formally exchanged between the British and Chinese Governments on the 
same day as the signature of the Joint Declaration. These Memoranda set out 
the respective positions of the two Governments. 

63. Since Hong Kong will no longer be a British dependent territory after 
30 June 1997, it will not be appropriate for those who are British Depend- 
ent Territories citizens by virtue of a connection with Hong Kong to be 
described as such after that date. The United Kingdom Government will seek 
Parliamentary approval for legislation which will give such British Dependent 
Territories citizens the right to a new status, with an appropriate title. 
This status will not give them the right of abode in the United Kingdom, 
which they do not possess at present, but it will carry benefits similar to 
those enjoyed by British Dependent Territories citizens at present, including 
the entitlement to use British passports and to receive British consular ser- 
vices and protection in third countries. The status will not. howe\er. be 
transmissible by descent. The United Kingdom Government will do all they 
can to secure for holders of these British passports the same access to other 
countries as that enjoyed at present by holders of British Dependent Terri- 
tories citizen passports. 

64. This new status will be acquired by former Hong Kong British Dependent 
Territories citizens only if they obtain a British passport before 1 July 1997. 
The only exceptions to this are: 

45 



(a) persons included in the passport of a parent before 1 July 1997 will be 
able to acquire this new status and will be able to obtain a British 
passport of their own after that date; 

(b) persons who were born between 1 January and 30 June 1997 will be able 
to acquire this new status if they obtain a British passport, or are 
included in the passport of a parent, on or before 31 December 1997. 
Those who are included in the passport of a parent will be able to obtain 
a British passport of their own after that date. 

65. The Chinese Memorandum states the Chinese Government's position that 
Hong Kong Chinese are Chinese nationals. It indicates, however, that those 
Chinese nationals who hold British travel documents may continue to use them 
after 1 July 1997. Such persons will not. of course, be entitled to consular 
protection by the United Kingdom Government in the Hong Kong SAR or in 
other parts of China. 



46 



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